₦airaland Forum

DonroxyII:
How do you think , Yours is irrational ....
Why do the government need to subsidize in the first place ..... Why can't we make our Refineries to function ..... Would any sane country operate petroleum the way Nigeria is doing ? ......

Yes, we want cheap fuel because we don't deserve to pay for more ..... Based on minimum wage in Nigeria as well as per capita , Fuel shouldn't be more than 40/litre ..... Yes ..... What is wrong with that ......

Why do we export the raw materials and import the finished goods ..... at a cost of raw materials plus cost of finished goods and plus profit margin .... Then you transferred all these stupidity over to your citizens .

Then further depletes the foreign reserves under guises of subsidy payments ..... Failed states , Failed analysts !!

1. Even if our refinereis function at full capacity...we still need to import at least 50million liters of fuel a day

2.It costs 9billion to build a new refinery....and we need 4 or 5 new ones.

3.Even if we build new refineries...the owners still have to make a profit.....

UrbanMetahuman:
reading and comprehending hard you o

This will be my last quote though. I only explain things to those who really want to learn.


subsidy means; A sum of money granted by the state or a public body to help an industry or business keep the price of a commodity or service low.

e.g, cost of importing petrol into the country is around 190-200, but government subsidies it to keep it 145 by granting extra sum of money.


now to you article


venezuela is trying to increase the price of fuel to checkmate smugglers that are smuggling fuel out of the country cos its cheap to make extra money in another country thereby causing scarcity at home.

its like marketers getting subsidized fuel from nigeria and smuggling it to ghana to sell for extra income thereby causing scarcity at home.. (does this ring a bell?)

increasing the price will make it less lucrative for smugglers. they also planned to keep current rate for registered vehicles in the country cos i could see you omitted that from your article for obvious and dubious reasons.



again, it is not the reason for hyper inflation or economic problem. pick your comprehension books again.

anyhoo, that would be all from me.. take care.

You missed the part where VENEZUELA was said to have been subsidising fuel for decades!

OK.....you don't want to admit you lost. Good evening. Ihave tried!

You said there was no subsidy...then after I pointed out there was a subsidy...you started defining subsidy for me...and then you pointed out that Venezuela is subsidsing fuel for registered citizens....

The problem is, you want cheap fuel, even itf the govt has to drain the treasury for it. That does not make economic sense.

Go and read the two articles I gave you.

Venezuela has been subsdising fuel for decades. QED.

DonroxyII:
Where did the dude went wrong . He said the standard of living in Nigeria is poor that is why we can not afford to buy fuel at #147/L ...... Countries with higher value per litre has better standard of living than Nigeria .... What is wrong in that ?

1.Liberia, Sierra Leone, Ghana, Cameroon, Ethopia, Uganda...don't have a higher standard ofliving than Nigeria....and they pay more for fuel.

2. We need fuel to be at $140 per liter to pay for subsidy, and to pay for everything else. Right now...it is at $70.

3.If we keep fuel at N145...we would keepon wasting money...

4.Here is how subsidy works. Assume you were selling yam. You sell yam at N800 per tuber to make a profit of N200 per tuber. Government forces you to sell at N200 per tuber and pays you N300 as 'subsidy benefit'...leaving you with a deficit of N300 per tuber...tellme, would you keepon selliung yam?

5.GSM was deregulated from the word go.Initially we paid N10000 for sim The GSM companies took the money, spent it on infrastructure and providing jobs...and soon prices dropped due to competition and increased investment...because GSM companies were allowed to make profitswithout subsidy. If we do the same for fuel......prices will rise to N300 or more....but would eventually drop as more andmore investors come into the country....since they can now make money without government forcing them to sell below profit in the name of subsidy. Need I say there will be more jobs too.

Rossikki:
You need to use your brain before quoting foreign-invented statistics. Explain how Nigeria has 144 million active phone lines if the majority live on less than a dollar a day. And you can take your nasty threat and stick it up your ass.

https://www.premiumtimesng.com/news/more-news/257906-active-mobile-lines-nigeria-hit-144-million-december-ncc.html

I did not threaten you.

I merely pointed out that someone else might not take your rudeness calmly as I have.

Good evening. And do grow up dear boy.

UrbanMetahuman:
now point to where it is listed in the article that venezuela subsidizes fuel to keep it at 4 naira and how that is the reason their economy failed?

just accept you goofed and edit your initial post cos it is fallacy and totally untrue.

OKAY....time for some more facts....

Venezuela's president has said its subsidised fuel prices should rise, to stop smugglers cheating the country out of billions of dollars.

"Gasoline must be sold at an international price to stop smuggling to Colombia and the Caribbean," Nicolás Maduro said in a televised address.

Like many oil producing nations, Venezuela offers its citizens heavily subsidised petrol.


Sauce is right here!

So why would Maduro be removing a fuel subsidy that in your own words....did not exist?



Here is some more....

President Nicolas Maduro said Monday that some of the world's cheapest petrol that Venezuelan drivers enjoy will soon be sold at world market prices to combat rampant smuggling.

"Gasoline must be sold at an international price to stop smuggling to Colombia and the Caribbean," Maduro said in a televised address.

Venezuela, like most oil producing countries, has for decades subsidised fuel as a benefit to consumers. But its fuel prices have remained nearly flat for years despite hyperinflation that the International Monetary Fund has projected would reach 1 million per cent this year.

That means that for the price of a cup of coffee, a driver can now fill the tank of a small SUV nearly 9,000 times. Recently, the average price of a coffee with milk was 2.2 million bolivars, or about 50 cents, local media has reported.

Smugglers do brisk business reselling fuel in neighboring countries. SOURCE

Still think I goofed again, son? Or is it...beautiful daughter?

(I love you google!)

abisogun119:
How wouls some one living under $1/ day afford fuel of $0.45 ...smhApc propaganda[color=#F2F2F2]t[/color]

The same way most African countries where people live under $1 a day can afford fuel.....at prices higher than Nigeria.

dadalicious:
I am moving to Venezuela

You won't like it there...

Why is Venezuela in crisis?

Hide
Under the late Hugo Chávez, who ushered in Venezuela’s socialist revolution in 1999, a new constitution and numerous elections placed nearly all government institutions under the control of the ruling Socialist party.

This concentration of power was aided by a feuding opposition which carried out ineffectual campaigns and electoral boycotts. After Chávez died of cancer in 2013, he was succeeded by Nicolás Maduro who is even less tolerant of dissent.

Growing political authoritarianism has coincided with greater state dominance over the economy. But expropriations, price controls and mismanagement have led to a 40% contraction of the economy in the past five years.

Oil accounts for 96% of Venezuela’s export income but many foreign companies have been driven out and production has dropped to a 30-year low.

The resulting fiscal crisis has prompted the government to print more money, which has led to hyperinflation and a collapse of the currency.

It also means that the government can’t import enough food and medicine to meet demand.

Maduro has rejected economic reforms out of loyalty to socialism and because many government officials are allegedly getting rich off the economic distortions – through exchange rate scams and by selling scarce food on the black market.

Sauce

LuciferKristi:
They don't produce oil.

Yes...and they earn less than $1 a day...just like most nigerians.

PLUS...we import most of the fuel we use in this country...and Dangote refinery won't make things better.

So, we ain't better than them.

Thanks.

UrbanMetahuman:
[s][/s]venzuala is not in economy mess because they subsidize fuel. fuel is cheap in venezuela because they have one of the biggest oil reserve in the world and they refine their own oil unlike here where we import refined oil. venezuela doesnt subsize oil.

economic mess is as a result of over dependent on oil instead of diversification.

1.Venezuela subsidses oil...it is one of the reasons why they don't have forex...MOST of it goes on subsidising oil

2.Costs of producing oil in Venezuela are high because most of the oil is offshore and has a high sulphur content...so they pay heavily in subsidy.

3.Saudi too has a high oil reserve...and they subsidsed oil till recently when the low oil price made it impossible.

4.Iagree with you on their economic mess being on their reliance on oil.

5.From this article...

crisis-hit Venezuela, one dollar can buy two Polar beers, a dozen eggs, or a bar of chocolate. Or, taking advantage of the black market exchange rate, it’s enough for 3.5m litres of petrol.

But the 92 tankers needed to carry the fuel would probably be stuck at the pump, broken down and without replacement parts.

Fuel in the oil-rich nation may be practically free, but motorists are finding it increasingly hard to keep their vehicles on the road. Petrol shortages are ever more common: motorists commonly wait for six hours or more in fuel queues.

Batteries, engine oil, and tyres are prohibitively expensive – if they are even available.

And although Venezuela has the largest proven oil reserves on the planet, faltering infrastructure has led to a steep drop in production. The US Energy Information Administration (EIA) predicts that oil production could fall to 1m barrels per day (bpd) this year, and again to 700,000 by December 2019.

Rossikki:
You don't need to be God to use your brain. I guess it is the white man that told you that lie that is your God. Ewu.

And don't insult people you disagree with.

Respond with facts, not with insults.

You called me names...when I posited a fact....so I called you a god since you are all knowing.

Anyway....next time, be more polished in your response. You could end up facing a major discomfort if you aren't.

Ta ra.

grandstar:
Truth is that the cheap petrol cost so much to subsidised in countries with huge populations and leave big gaps in the government purse.

If Nigeria ends the subsidy regime, it would save over a trillion naira

That is the truth....but most Nigerians love their free fuel.

And long term...it could even bring in foreign investment...and price reduction via competition.

Ah well....

Rossikki:
NO THEY DON'T. IGNORAMUS.

Good evening, god.

transformed:
must we be the only oil producer that import refined oil? Must we be world highest importer of refined oil? Venezuela dont import refined oil

1.Venzuela's refining and production capacity is in a mess

2.They have to import as well.

INFACT ...oil production is dropping,

And there are fuel queues EVERYWHERE.

So, tellme another story.

oladayo63:
Baba, you dey misyarn jawe. If the standard of living is good, no one will complain if oil is #300 per litre. So because Venezuela is in deep poo, the masses should die of hunger. Tackle the government to improve the economy. Even with the fuel price, companies still layoff staff, unemployment is on the rise. The dude you quoted is right, it's about standard of living. And yes, a majority of Nigerians can't afford a $ per day, IMF data support that fact.

Benin, Ghana, Sierra Leone, Liberia, Cameroon, Chad, Ivory Coast ....most of them live under $1 a day.

And they pay higher for fuel than Nigeria does.


So tell me another story.

We are not a rich nation. And we have bad governments including this current one...who refuse to remove oil subsidy so that prices willcome down via competition.

LuciferKristi:
It's not about the cost. It's whether the citizens can afford it.

Most Nigerians survive on less than $1 daily, how many can afford fuel at its current cost?

Most Sierra Leoneans, Liberians, Chadians, Ghanaians, Ethopians and Cameronians survive on less than $1 a day

Yet they pay more than Nigerians for fuel.

LuciferKristi:
Venezuela has the world's largest oil reserves by a wide margin.

That's why the US desperately wants to start a civil war there so they can install a new regime since Maduro has refused to dance to their tune.

So you want to be ruled by Maduro.

Let me tellyou why Venezuela is in a mess

1.Their equivalent of NNPC...PDVSA....was nationalized, and forced to take on thousands of unqualified people in the name of job proivison. As a result, they cannot even exploit the oil proprely enough.

2.Most of Venezuela'soil is offshore and is sulphur rich. As a result it costs a lot.

3.Venezuela's government nationalised all businesses, wasted billions of forex on subsdising everyhting...and as a result, the country is broke.

4.Venezuela imports everything. Even more than Nigeria. Even things like chicken and toilet roll is imported.

5.EVEN if a US friendly government takes over...THE COUNTRY will still HAVE THE SAME PROBLEMS (AND yes, I know the US wants Maduro out...)...because the problem is their over dependency on oil.

Dutch disease. Read it up.

erico2k2:
NUmber 2 is ridiculously WRONG, where did you gert that from??

OK....

It costs N170 to import one liter of fuel.

Marketers meanwhile sell fuel at N145.

Govt pays them or it is supposed to pay them the difference of N25 per liter...but can't.

Marketers cannot make profit...so smuggle fuelout of the country to places like Benin and Ghana where fuel is sold at higher prices...to balance their books.

Simples.

(And FFS...I am not defending any government....I am telling the truth that we cannot sustain a subsidy regimen, and we should have deregulated since 2012...when GEJ tried to raise prices!)

LuciferKristi:
It's not about the cost. It's whether the citizens can afford it.

Most Nigerians survive on less than $1 daily, how many can afford fuel at its current cost?

I honestly give up. Some of you guys have no understanding of how economics works at all.

1.We import most of the fuel we use in Nigeria

2.The landing cost of imported fuel is above N170 per liter.

3.NNPC pays a ''subsidy'' to keep the fuel price at N145.

4.That is why most marketers cannot import fuel, why NNPC is the SOLE IMPORTER of fuel..and why NNPC partly cannot declare its assets.

5.And that is why we keep on having fuel scarcity...because most marketers cannot make a profit at N145 per liter.

6.We need oil to be at $140 per barrel to break even. Right now...we don't have enough to do so because oil has been below $75 since 2015!

7.GEJ tried to increase fuel to N140 from N65. You Nigerians protested...so we beat it down to N97...and then to N87 and that is partly why GEJ could not save forex...because we were wasting it on fuel. Meanwhile....scarcity was happening...and by 2013...fuel was being sold above the market price of N97 excpet in Lagos and Abuja...because most marketers could not survivie on profits as low as N2 per liter.

8. Please stop misinforming people. Venezuela is where it is because they import all they need and because they overspend all their money on subsides they cannot sustain, and because their govern,ment is imcompetent. Not because America...who buys most of their oil and pays for it.

9. And you APC and PDP guys better get our country off oil!

Modified...

From many of the responses below...it is pretty obvious most Nigerians want cheap things without thinking of the cost.

Many Nigerians for example want free education. Forgetting that in countries like Germany that have free education....the cost is half their salaries in taxes.

I hear people chanting that most Nigerians live under $1 a day. Well...if you can afford to fill your car tank, your generator tank and drive long distances...you are not living under $1 a day. Sorry...

The truth is, we cannot keep on sustaining cheap fuel, cheap electricity,cheap education. Our population is 200million and we produce oil at a rate less than that of the UAE which has 11million people. Either oil goes up to $140 per barrel...or we keep on taking loans to sustain us.

This is not a defence of bad government, or of Buhari or of GEJ or of any of your favourite talking points. It is reality. We are a poor nation. And we need to face that fact ...and stop excusing corruption and lying, and religoous crisis, and stealing. We need to spend what little money we have on strategic things like power, rail, and technical education. We need to get industrial fast...so that we can make things the world needs...and export things in bulk. And we need to accept that it is going to take some decades...so let us forget about enjoyment and work hard at it. Like South Korea, China and Japan...those countries got to where they are because of decades of hard work.

I don't like making this argument. To be honest I wish fuel cost N10 per liter or less. I wish we could pay fees of N10000 or less in our unviersites. I wish we had no corruption , and I wish APC and PDP were not so dissapointing. But we have to face the fact. If we do not remove subsidy....we are going to keep on wasting millions of naira on nothing.....whereas if we remove subsidy...for sure...fuel will cost N400. People will suffer. Most people would end up living hellish lives. But eventually investment willflow in,jobs will be created and the price will fall. And the economy would recover....

So,let us face the fact. Venezuela has subsidy. And as a result they have thrown billions down a bottomlesspit for nothing...and they are paying for it. And it is high time we Nigerians woke up to the fact that living on just oil is not good for us. We are a nation of oil addicts. Time we broke that addiction.

Hmmm

I can see some Nigerians looking at Venezuela and admiring their price of N4 perliter.

What they don't know is

1.Veenzuela is depleting their foreign reserves by keeping fuel at N4 due to overspending on subsidy.

2.Here is how a subsidy works. Government tells you to sell your fuel at a low price, and pays you the difference...preventing you from making a profit. As a result...you lose money.

3.Venezuela is in an economic mess.

And this is what some Nigerians want. Wake up.

Swiftboy:
Your analysis is off completely.

Even at $50 per barrel we are should be able to fund our budget. We export around 2 million barrels of crude oil per day. That's about 13 trillion Naira per year. Our budget is only 8 trillion. Let's say we are making 10 trillion naira per y year.

This country is rich but so many leakages and corruption coupled with lack of vision by our government has plunged is into poverty.

That's why we need to take our country back from the corrupt political elites that have brought the nations to her knees.

1.We can't fund our budget at $50....we need oil to be at $140 per barrel.(Saudi can't fund its budget at $50...and they produce more oil than we do).

2.N8 trillion is not enough for Nigeria. (A fellow Nairalander on another thread even put it that a budget of N9 trillion amounts to N45000 per Nigerian).

3.For instance, university education alone needs N1.5 trillion in extra...EXTRA....funding to keep FEDERAL universites at an even keel (according to the 2009 ASUU fg agreement). This year we spent N800bn on education...ie all sectors including university...alone.

4.As Fitch puts it we need oil to be at $140 ..ie our breakeven price...which is the price we need oil to be at to meet spending demands, and balance the budget. $50 would leave us needing to borrow excessively just to stay afloat (In short...we hand over our economy to the IMF to run for us....).

5.And yes...we need to fight corruption as well. The stealing is bad because it is from a treasury that is already impoverished.

6.China is the world's lender...because in the late 1970's they made the decison to go industrial...and to become more capitalist. South Korea ,and Japan too made that decison...

7.The only rich oil producers are countries like Saudi and Norway and the UAE which have small populations, and in Norway's case...are industrialised nations as well.

Baawaa:
34 years by now you suppose to have something tangible to fall on assuming they deport you

He is severely disabled. I doubt he knows how to go about that.

sanpipita:
You still haven't told me how buhari saved Money like you said, where is the so called money buhari saved

And have a good evening.

I am not into your PMB vs GEJ politic...sir. I am for Nigeria industrial!

flyca:
Please is this Osaka lady an African?
I'm asking because she looks sooooo African, not that I'm trying to attribute her winning to Africa o

Her father is from Haiti, her mum from Japan.

She identifies as Japanese though.

Blue3k2:
Some people have weird mentality. They want government to provide all sorts of services but want to pay for anything. It's ridiculous to that state let these guys keep drawing water without paying. If you dont pay bills you dont want service it's that simple.

Water utilities are usually profitable for city or state that provides it since people need it. Hopefully they expand grow IGR this way.

Word.

The problem is when we got independent...we based our economy on a policy of sharing money...which led people to think that government was sitting on some bottomless pit of money.

That is the attitude that encourages people not to pay for services, looting by big men,etc...

PrimadonnaO:
That run-down state! How did they manage to accumulate such debt?

It's like a village farmer owing someone 1billion naira. Preposterous!


*Modified*

It's an internal debt. The residents are mostly poor, though. That's why they can't pay 500 naira for water.

So,how does the water borard get money to pay for improvements.?

That is the problem.

SarcasticGenius:
This one be heavy duty o. Over 2.3 billion dollars in 11 weeks, while Sambo Dasuki is on trial for 2.1 billion stolen over 3 years. APC una be masters for fvckery.

[]

If you read the article part of the money went towards keeping the naira afloat, ie preventing it from plummeting to n1000 to $1.

Part of it went to elections...but it has not reached the Dasuki levels yet!...and it still does not obscure the fact that GEJ depleted our forex reserves.

Having said that...the issue really is that Nigeria is a resource dependent country...and it is high time we tool steps to end our resource dependency. PDP vs APC, GEJ vis PMB is all irrelevant.

preciousfeb:
Please stop giving wrong information. Oil price has been over $70 in the past one year. The crude oil price plunge happened early 2015 to mid 2016. The Oil price has since then kept increasing. Don't back a corrupt govt with unfavorable decimals. You are sure one of those benefitting from this corrupt govt from all indications.

Nigeria needs oil at $139 per barrel to not borrow...and to stay afolat.

Oil staying at $70 is meaningless. Plus we have to pay back the debts incurred when oil fell to as low as $30 in 2015/16.!

Anyad231:
it was not just d depletion of their reserves that caused d chaos in venezula...these were other issues caused by
Economic policy, crime, corruption, economic downturn, shortages, unemployment, hyperinflation, authoritarianism, human rights violations and political conflict.....we are gradually getting there

I doubt we would get there...largely because

1.We manufacture a lot of goods here. For example...we manufacture things like toilet roll, soap, beer, soft drinks, etc here. Venezuela was imporitng most of that stuff....which means wasted froeign exchange.

2.Dollar restrictions are still in effect.

3.We have a fuel subsidy that keeps fuel at N145 per liter. Waste of money. Venezuela has a fuel subsidy that until recently kept fuel at N50-60 per liter....wasting valuable forex.

4.Chavez and Maduro virtulally nationalized private businesses...and forced them to sell their products at low prices (imagine Bubu nationalizing companies like Dangote and Nigeria Breweries and forcing them to sell things like Cement at N800, and Star beer at N30!)...which made it difficult for them to keep on employing staff, and making products. (As a result, Venezuela's only beer company has closed...meanwhile Nigeria Breweries and Guiness Nigeria keep on operating).

5.Many Nigerian manufacturers learned to use local raw materials a long time ago.(this predates 1999...by the way).

6.NNPC , as you know, is partial in its hiring. But that is limited to the office jobs...the techinical jobs are still merit based (plus NNPC has a number of joint ventures with big oil companies...which tend to be very merit based in employment)

Venezuela? Their equivalent of the NNPC...the PDVSA...was wrecked by Chavez and Maduro's weird policy of employing hundreds of inexpirenced people in both techincal and white collar jobs...which means the company is a shadow ofitself. Add the fact that Venezuela's diminishing forex means that the company cannot invest in new euipment plus the high cost of extracitng oil in Venezuela.....you can imagine.

sanpipita:
Where did buhari save? do you realize then opposition forced GEJ to share funds rather than save, let's be truthful to ourselves lies helps nobody

1.The foreign reserve was already in decline long before the governors took GEJ to court. Need I remind you that most of those governors were from the PDP too.?

2.Buhari met the reserve at $32Bn. It went down to $28 BN before it reached $47bn, and now has fallen to$45 bn.

3.It does not mean that Bubu is better than GEJ...it means our economy is so dependent on oil...and it is high time we developed polices to get rid of that dependency....and it starts by spending more on power, transport,and removing fuel subsidy completely!

OreMI22:
BUHARI AND HIS GOVERNMENT ARE ROBBING NIGERIA BLIND.

So we have:

1. $30 billion dollars debt borrowed by Buhari from China,World Bank and IMF,

2. Billions of dollars recovered by whistle blowers mysteriously unaccounted

3. Billions of dollars earned in excess crude price of oil above $75 dollars while we budgeted for $45 dollars

4. Billion of dollars from the new taxes this regime has imposed on everything

YET, THE BUHARI REGIME IS STILL DEPLETING OUR FOREIGN RESERVE??

In response....

Nigeria needs oil to be at $140 per barrel for us not to borrow.

The $45 you mention does not make sense...and even IF there was no corruption....we would still be borrowing.

Here is a list of countries's breakeven oil prices, according to global ratings company Fitch (as at 2017)

Nigeria at $139
Bahrain at $84
Angola at $82
Oman at $75
Saudi Arabia at $74
Russia at $72
Kazakhstan at $71
Gabon at $66
Azerbaijan at $66
Iraq at $61
Abu Dhabi, United Arab Emirates, at $60
Republic of Congo at $52
Qatar at $51
Kuwait at $45

Sauce

Anyad231:
please why build ur reserves while the masses are suffering, no jobs, no good roads, no security, no infrastructures. ...we need sound men to get us out of the mess these dullard are gradually digging 4 our future. Even if there is no president, we will still sell crude oil

Because if we don't build reserves...we end up like Venezuela.

Venezuela is down to their last $10billion in reserves. They continued to spend dollars on their people...and as a result, they have no dollars to back up their economy....meaning you now need a wheelbarow full of Venezuelan currency to buy essentials like bread, beer, toilet roll, rice, etc.

There are queues for food, water, etc...and millions have left the country.

Nigeria is bad...but compared to Venezeula...we are far better off.Ironically, it is thanks to the lifeless one, and to people like Emefiele who learned the lessons of the 1980's

naijapips04:
how many months was oil above $120 throughout PDPs 16 year rule?

Between 2013-14...and above $100 on average from between 2011-14.

Oil had been on the rise from 2003....and the highest prices fell between 2010-14.

See here


Thing is, GEJ benefited from high oil prices above 100 dollars...but did not save.

I should add that the problem with Nigeria...and that includes this current govt...is that we are not ready to spend our oil money wisely.(Sorry, I have to say this because people like you would callme a BMC crew...and I am not. I am a Nigerian). I hail Bubu for saving when times were hard...but bash him for bad polices like the fuel subsidy thing, the corruption, and the refusal to deregulate the electricity sector.